FCCI welcomes suspension of tax deduction on mobile phone recharge

FAISALABAD: Faisalabad Chamber of Commerce & Industry (FCCI) has welcomed the Supreme Court's decision to suspend the deduction of taxes on recharge/top-ups of mobile phone and demanded that court should also pass a verdict to suspend the recovery of sales tax on petroleum and other products in order to facilitate the people getting non taxable salaries or income.

In a statement issued here Thursday, FCCI president Shabbir Hussain Chawla said that on recharge of Rs 100, consumers were getting only Rs 65.5 in their balance as 5.5 percent was deducted as withholding tax, 19 percent as sales tax and another 10 percent as services charges. In case of getting balance from private persons another service charges were also deducted which a heavy burden particularly on the individuals getting non-taxable salary or income.

Chawla termed it highly unjust as the people living below the poverty line were also using mobile and they were also subjected to this unjustified deduction.

Denying the claim of Federal Board of Revenue (FBR) that tax payers could adjust sales tax in their annual return, he termed it unrealistic as most of the people who did not fall within the category of tax payer, they also refrain from filling tax returns and hence the sales tax paid by them is completely utilized by the government.

He said the sale tax deducted from the ineligible tax payer should be returned immediately to the individual through their mobile phone.

He further said that mobile companies that had deducted tax from such consumers should be repaid to them through their mobile phones along with completed detail of the amount deducted against their cell phones.